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Best practices of background screening in small business

Aug 01, 2013 Quinn Thomas

Background screening is a complex and critical component of business operations, especially in smaller firms when budgets are relatively restrained. Entrepreneurs need to ensure that their background checking process is tight, and should consider outsourcing the task to experienced professionals or firms when in doubt. This can help avoid a variety of issues, including investigations from the Equal Employment Opportunity Commission and lost opportunities to hire new talent.

The rules of background checking continue to become more complex, and many businesses are starting to use advanced technology to ensure quick turnarounds on the process. However, some small business owners have started to push back on new federal guidelines, including those that relate to immigration standards. Federal regulators have worked to create more stringent identification programs to prevent undocumented labor, but entrepreneurs believe that this is creating a financial problem.

SMBs push back
The Wall Street Journal recently reported that the new E-Verify system, which is the federal government's latest verification program, is slowing down the hiring process for small business owners across the nation. According to the news provider, many businesses, especially those in the services industry, are struggling to quickly and accurately screen applicants as a result of the new program.

The source explained that nearly 470,000 employers are enrolled in the system, which initially began in 1997, though the executives have cited extreme hardship when trying to find viable talent. This might be more indicative of the problem with undocumented labor that has taken place in the past several decades, as one small business owner said that he had to turn away at least nine applicants because of the E-Verify program.

"It has significantly increased our recruiting costs," Daniel VanLoh, owner of Rocket Farm Restaurants LLC, told the Wall Street Journal. "We spend time and money recruiting and doing background checks on good candidates, and if the E-Verify comes back with a rejection, we have to start the process all over again."

The news provider noted that the system is free, and essentially matches workers' information to existing Social Security numbers. In any instance where the applicant's information doesn't match up, the employer cannot legally hire the individual. However, as Mr. VanLoh explained, the ways in which screening is handled in small business might be in need of refinement.

Entrepreneurs should consider running the E-Verify check before investing any other budget in screening an employee.

Tips from the SBA
The U.S. Small Business Administration offers a variety of background screening tips for entrepreneurs on its website, and asserts that owners need to ensure that they are making informed decisions when it comes to on-boarding. According to the administration, entrepreneurs cannot discriminate against employees who have gone through bankruptcies, medical conditions or disability.

The organization added that employers cannot use lie detector tests, in accordance with the Employee Polygraph Protection Act.

For these reasons and more, small business owners should consider taking advantage of the expertise of firms that specialize in background screening procedures.